In terms of population Nigeria by far is the largest country in the African continent, which according to the World Bank is over two-hundred million inhabitants. Nigeria’s largest city and financial hub is Lagos, which within that population, houses according to the National Population Commission of Nigeria at over twenty million people.
Given its size and influence in the African continent, a recent analysis by the Fintech Times puts the largest city in the country as one of four emerging fintech hubs in the entire African continent – alongside Nairobi, Johannesburg and Cape Town.
According to their website, the Securities and Exchange Commission (SEC) is working towards setting up a Regulatory Sandbox that will offer a ‘safe space’ in which start-ups and other businesses can test innovative products, services, business models and delivery mechanisms relating to the capital market in a live environment without immediately satisfying all the necessary regulatory requirements.
OBJECTIVES OF THE REGULATORY SANDBOX OPERATION IN NIGERIA
Note this is pending on final approval and announcement of the committee members deciding upon this matter.
- To increase the potential for innovative business models that advance financial inclusion;
- To reduce time-to-market for innovative products, services, and business models;
- To increase competition, widen consumers’ choice and lower costs;
- To ensure appropriate consumer protection safeguards in innovative products;
- To clearly define the roles and responsibilities of stakeholders and the operations of the Sandbox for the Nigerian Payments System industry;
- To ensure adequate provisions in regulations to create an enabling environment for innovation without compromising on safety for consumers and the overall payments system; and
- To provide an avenue for regulatory engagement with Fintech firms in the payment space, while contributing to economic growth.
RESPONSIBILITIES OF THE CENTRAL BANK OF NIGERIA (CBN) IN THE SANDBOX OPERATION
The Central Bank of Nigeria shall be responsible for:
- Issuance of the Regulatory Framework for Sandbox Operations;
- Admitting all eligible participants into the Sandbox process;
- Issuance of a Letter of Approval (LoA) for entry into the sandbox;
- Issuance of an Approval-in-Principle (AIP) in order to deploy its digital solution to the market, subject to the Innovator being able to meet CBN’s licensing requirements;
- Ensuring that the objectives of the Sandbox are fully achieved;
- Conducting oversight on Sandbox participants’ operations and systems; vii. Monitoring other stakeholders to ensure compliance;
- Issuing circulars to regulated institutions on the operations of the Sandbox;
- Reviewing this framework for the operations of the Sandbox from time to time;
- Apply appropriate sanctions for non-compliance where needed;
- The Director, Payments System Management Department of the Central Bank of Nigeria shall review cases referred to it before issuance of an operating license or a formal clearance to an entity/participant for the purpose of delisting from the Sandbox.
For more information visit their website to express your interest here.